SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] Quarterly report under Section 13 or 15(d) of the Securities Exchange
Act of 1934 for the quarterly period ended September 30, 2002.
[ ] Transition report under Section 13 or 15(d) of the Securities Exchange
Act of 1934 for the transition period from to .
Commission file number: 033-2408D
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TRSG CORPORATION
(Exact name of small business issuer as specified in its charter)
Delaware 87-0453832
---------- ------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
3095 East Patrick Lane, Suite 1, Las Vegas, Nevada 89120
----------------------------------------------------------
(Address of principal executive office) (Zip Code)
(702) 938-9316
--------------------------
(Issuers telephone number)
Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes XX No
---- ----
The number of outstanding shares of the issuers common stock, $0.001 par value
(the only class of voting stock), as of November 13, 2002 was 98,408,731.
TABLE OF CONTENTS
PART I
ITEM 1. FINANCIAL STATEMENTS..................................................3
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.............4
PART II
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K......................................7
SIGNATURES.....................................................................8
INDEX TO EXHIBITS.............................................................10
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ITEM 1. FINANCIAL STATEMENTS
As used herein, the term "Company" refers to TRSG Corporation, a Delaware
corporation, and its subsidiaries and predecessors unless otherwise indicated.
Consolidated, unaudited, condensed interim financial statements including a
balance sheet for the Company as of the quarter ended September 30, 2002, and
statements of operations, and statements of cash flows for the interim period up
to the date of such balance sheet and the comparable period of the preceding
year are attached hereto as Pages F-1 through F-6 and are incorporated herein by
this reference.
[THIS SPACE LEFT BLANK INTENTIONALLY]
3
TRSG CORPORATION
- CONTENTS -
PAGE NUMBER
Financial Statements:
Balance Sheet F-1
Statement of Operations F-3
Statement of Cash Flows F-4
Notes to Financial Statements F-6
4
TRSG CORPORATION
UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEET
ASSETS
SEPTEMBER 30,
2002
CURRENT ASSETS:
Cash and cash equivalents $ 6,728
Accounts receivable - Related Party 500,026
Inventories 77,076
----------
Total current assets 583,830
PROPERTY & EQUIPMENT:
At Cost 440,963
Less accumulated depreciation and amortization (360,993)
----------
79,970
OTHER ASSETS 40,392
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$ 704,192
F-1
TRSG CORPORATION
UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEET TRSG CORPORATION
TRSG CORPORATION
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
SEPTEMBER 30,
2002
CURRENT LIABILITIES:
Bank Overdraft $ 65,829
Current maturities of long-term debt 603,166
Accounts payable:
Trade 234,694
Commissions 210,922
Accrued expenses 51,595
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Total current liabilities
1,166,206
LONG-TERM DEBT -
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STOCKHOLDERS' EQUITY (DEFICIT):
Preferred stock - $.001 par value
Authorized - 5,000,000 shares
No shares issued and outstanding -
Common stock, - $.001 par value
Authorized - 200,000,000 shares at
Issued and outstanding -
98,408,731
98,409
Additional paid-in capital 3,662,670
Accumulated (deficit) (4,223,093)
-------------
Net Stockholders - Equity (Deficit) (462,014)
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$ 704,192
F-2
TRSG CORPORATION
UNAUDITED INTERIM CONDENSED STATEMENT OF OPERATIONS
NINE MONTHS ENDED THREE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
2002 2001 2002 2001
SALES
$ 809,863 $ 1,681,399 $ 250,629 $ 584,114
COST OF SALES 177,696 408,276 60,594 186,772
------------ ------------- ------------ ------------
GROSS PROFIT 632,167 1,273,123 190,035 397,342
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 1,711,563 2,128,511 458,727 812,478
(LOSS) FROM OPERATIONS (1,079,396) (855,388) (268,692) (415,136)
OTHER INCOME (EXPENSE):
(Loss) on sale of A & A
Medical Supply Co. (43,105)
Interest - net (13,833) (28,422) (7,100) (6,045)
Gain on settlement - 568,970 - -
Abandonment of leasehold
improvements (26,329) - - -
Impairment of goodwill (1,203,953) - - -
Miscellaneous income
(expense) (24,622) 7,550 (24,622) 505
------------ ------------- ------------ ------------
Net Other Income (Expense) (1,311,842) 548,098 (31,722) (5,540)
------------ ------------- ------------ ------------
NET (LOSS) $(2,391,238) $ (307,290) $ (300,414) $ (420,676)
============ ============= ============ ============
BASIC LOSS PER SHARE $ (0.04) $ (0.20) $ (0.00) $ (0.02)
============ ============= ============ ============
WEIGHTED AVERAGE SHARES
OUTSTANDING 65,106,917 17,317,285 95,726,123 18,693,638
============ ============= ============ ============
F-3
TRSG CORPORATION
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
2002 2001
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) $ (2,391,238) $ (307,290)
Adjustments to reconcile net (loss)
to net cash from (to) operating activities:
Depreciation and amortization 28,306 97,479
Impairment of Goodwill 1,245,925 -
Stock issued for Services 298,596 97,802
Changes in operating assets and liabilities which
increase (decrease) cash flow:
Accounts Receivable 129,780 (49,425)
Inventory 422,518 (79,800)
Prepaid Expenses - 115,773
Accounts Payable and Accrued Expenses (247,684) 226,207
Deferred Revenue - (254,771)
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Net cash provided (used) from operating activities (513,797) (154,025)
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CASH FLOWS FROM INVESTING ACTIVITIES:
Capital Expenditures 106,640 (54,571)
Purchase of TRSG Corporation - (350,000)
Purchase of A & A Medical Supply Co. (50,000)
Advances (to) from Related Parties 322,180 (763,716)
Cash received in acquisition - 2,246
Deposit 13,780
Other - 5,350
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Net cash provided (used) from investing activities 442,600 (1,210,691)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Bank Overdraft 65,829 -
Net proceeds from issuance of stock - 1,198,592
Net proceeds from term debt - 191,761
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Net cash provided (used) from financing activities
65,829 1,390,353
F-4
TRSG CORPORATION
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
- CONTINUED
NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
2002 2001
NET INCREASE (DECREASE) IN CASH EQUIVALENTS (5,368) 25,637
CASH AND CASH EQUIVALENTS -
beginning of period 12,096 -
CASH AND CASH EQUIVALENTS -
end of period $ 6,728 $ 25,637
============ ===========
SUPPLEMENTAL DISCLOSURE
Cash Paid For:
Interest $ 13,833 $ 26,734
Taxes $ - $ -
============ ===========
NON CASH INVESTING AND FINANCING ACTIVITIES
STOCK ISSUED FOR:
Services $ 298,596 $ 97,802
Debt Elimination - 25,000
Asset Acquisition $ - $ 1,304,131
============ ===========
F-5
TRSG CORPORATION
NOTES TO UNAUDITED INTERIM CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2002
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
The consolidated balance sheet as of September 30, 2002 and the
related consolidated statements of operations and cash flows for the
nine months ended September 30, 2002 and 2001 are unaudited. In the
opinion of management, the information reflects all adjustments that
are necessary to a fair presentation of the financial statements. The
results of operations for the nine months ended September 30, 2002 and
2001 are not necessarily indicative of the results to be expected for
the whole year.
NOTE 2 - BUSINESS COMBINATION AND SUBSEQUENT IMPAIRMENT OF GOODWILL:
On January 11, 2001, the Company issued 13,448,660 shares of its stock
to Gateway Distributors, LTD. ("Gateway"), a publicly held company, in
exchange for many of the assets and operations of Gateway. The Company
issued an additional 8,000,000 shares on January 4, 2002, another
10,438 shares, on April 12, 2002 and an additional 45,000,000 shares
on August 26, 2002 to Gateway for its customer lists and expertise. As
of September 30, 2002, this resulted in a 67% ownership of the Company
owned by Gateway. As a result, the Company is consolidated into
Gateway's consolidated financial statements.
These transactions were accounted for under the purchase method of
accounting; therefore, assets and liabilities were recorded on their
fair values at the dates of acquisition. Operating results have been
included in the Company's statement of operations from the date of
acquisition. Goodwill was recorded as the amount paid for the assets
of Gateway in excess of the hard assets received. With significant
losses occurring through June 30, 2002, the Company determined to
recognize an impairment loss at June 30, 2002 and wrote off all
goodwill for a total of $1,245,925, or a net after amortization of
$1,203,953.
NOTE 3 - SETTLEMENT PAYABLE:
On December 29, 2000, the Company obtained a settlement on the
judgment against it of $618,970 for $50,000. The obligation was
satisfied and resulted in a gain on settlement of $568,970 for the
period ended March 31, 2001 and is reflected in the financial
statement for the nine months ended September 30, 2001.
F-6
ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULT
OF OPERATION
General
As used herein the term "Company" refers to TRSG Corporation, a Delaware
corporation, its subsidiaries and predecessors, unless the context indicates
otherwise. The Company was originally incorporated in the State of Delaware on
January 11, 1988. On January 11, 2001, the Company issued 13,448,660 shares of
its common stock to Gateway Distributors, Inc. ("Gateway"), a publicly held
company, in exchange for many of the assets and operations of Gateway.
Additional shares totaling 53,010,438 have been issued during 2002 through
September 30,2002 to compensate for asset purchase and distributor base Gateway
turned over to the Company. As of September 30, 2002, this resulted in majority
ownership in the Company and the consolidation of the Company into Gateway's
financial statements.
The Company's products are marketed through network marketing organizations
within the United States and wholesale personal import sales outside of the
United States.
Network marketing enables the Company's independent distributors in the United
States to earn profits by selling the Company's products to retail consumers.
Distributors may also develop their own distributor downline organizations by
sponsoring others to do business in any market where the Company operates,
entitling the sponsors to receive overrides or commissions (cash incentives,
including royalties and bonuses) on product sales within their downline
organizations.
The Company believes that through special blends, whole foods such as grains and
vegetables can be combined to help produce optimum health. Recent studies reveal
that prevention through health maintenance is a key to enjoying a healthier
lifestyle. However, health challenges today are at an all- time high. The need
for proper nutrition has never been greater. The Company markets whole food
products based on the proposition that pure, natural, unprocessed, unpreserved,
unsprayed, simple, organic foods provide whole food nutrition. The Company
believes that whole food nutrition is the key, the answer, and the solution to
creating a long healthy life. The health care products that the Company sells
are intended to provide nutritional supplementation to the product's users. The
products are not intended to diagnose, treat, cure or prevent any disease.
As previously disclosed in the Form 10-QSB of the Company, for the period ended
June 30, 2001, the Company entered into an agreement to acquire substantially
all of the assets and business of A&A Medical Supply Company. The transaction
closed on or about July 1, 2001. On February 1, 2002, the Company sold
substantially all of the assets and business originally acquired from A&A
Medical Supply Company to A and A MEDICAL COMPANY, a Nevada Limited Liability
Company ("Buyer"). For more information on this transaction see Form 10-QSB of
the Company for the period ended March 31, 2002 and Exhibits attached thereto.
Results of Operations
Sales for the quarter ended September 30, 2002, were $250,629 compared to
$584,114 for the same period in 2001. The decrease in sales is attributable to
the Company's lack of inventory. The lack of inventory was the result of the
Company's lack of cash. Costs of sales were $60,594 for the quarter ended on
September 30, 2002, compared to $186,772 for the comparable period in 2001. Cost
of sales decreased due to a drop in sales.
4
Selling, general, and administrative expenses were $428,276 for the three months
ended on September 30, 2002 and $812,478 for the comparable period in 2001, a
decrease of $384,202. The primary reason for the decrease was a decrease in
sales and a decrease of amortization for goodwill which has been determined to
be totally impaired and written off effective on or before June 30, 2002.
Net loss was $300,414 during the three months ended on September 30, 2002,
compared to a net loss of $420,676 for the comparable quarter in 2001. The
reduction in net loss of $120,000 is primarily a reduction in overhead.
Liquidity and Capital Resources
The Company had a net working capital deficit of $582,376 for the nine months
ended September 30, 2002, as compared to a $133,963 deficit at the end of
December 31, 2001. The Company's working capital deficit increased due to the
operating loss since December 31, 2001.
Cash flow used in operations was $514,000 for the nine months ended September
30, 2002, compared with cash flow used for operations of $154,000 for the
comparable period in 2001. This is a decrease in cash of $360,000 attributable
to the losses of the Company.
Cash flows from investing activities for the nine months ended September 30,
2002 were $443,000, compared with cash used in investing activities of
$1,211,000 for the comparable period in 2001, or a $768,000 improvement.
Cash flow generated from financing activities was $65,829 for the nine months
ended September 30, 2002 as compared to $1,390,000 for the comparable period in
2001.
Due to the Company's cash flow fluctuations, the Company experiences occasional
cash flow shortages. To satisfy its cash requirements, including the debt
service, the Company must periodically raise funds from external sources. This
often involves the Company conducting exempt offerings of its equity securities.
Impact of Inflation
The Company believes that inflation has had a negligible effect on operations
over the past two years. The Company believes that it can offset inflationary
increases in the cost of materials and labor through increased sales and
improved operating efficiency.
Capital Expenditures
The Company made capital expenditures on property and/or equipment over the
periods covered by this report.
Going Concern
The Company's ability to continue as a going concern is an issue raised as a
result of an accumulated deficit of $4223,093 as of September 30, 2002. The
Company's ability to continue as a going concern is subject to the ability of
the Company to obtain a profit and /or obtaining the necessary funding from
outside sources. Management is committed to taking the necessary steps to ensure
the Company remains a going concern. Management's plan to address the Company's
ability to continue as a going concern includes: (1) obtaining additional
funding from the sale of the Company's securities; (2) increasing sales; (3)
obtaining loans and grants from various financial institutions where possible.
Although management believes that it will be able to obtain the necessary
funding to allow the Company to remain a going concern through the methods
discussed above, there can be no assurances that such methods will prove
successful.
5
PART II
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a)Exhibits
Exhibits required to be attached by Item 601 of Regulation S-B are listed
in the Index to Exhibits on page 8 of this Form 10-QSB, and are
incorporated herein by this reference.
(b)Reports on Form 8-K.
The Company filed no reports on Form 8-K during the period covered by this
report.
[THIS SPACE LEFT BLANK INTENTIONALLY]
6
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, there unto
duly authorized, this 13th day of November 2002.
TRSG Corporation.
By: /s/ Richard Bailey
-----------------------------------------------
Richard Bailey
Its: President, Chief Executive Officer and Director
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, Richard Bailey, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of TRSG
Corporation..
2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, the results of operations
and cash flows of Trsg Corporation. as of, and for, the periods
presented in this quarterly report.
4. Trsg Corporation.'s other certifying officer and I are responsible for
establishing and maintaining internal controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for Trsg Corporation.
and have:
(a) designed such internal controls and procedures to ensure that
material information relating to Trsg Corporation., including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
quarterly report is being prepared;
(b) evaluated the effectiveness of Trsg Corporation s internal
controls and procedures as of a date within 90 days prior to the
filing date of this quarterly report (the "Evaluation Date"); and
(c) presented in this quarterly report our conclusions about the
effectiveness of the internal controls and procedures based on
our evaluation as of the Evaluation Date;
7
5. Trsg Corporation's other certifying officer and I have disclosed,
based on our most recent evaluation, to Trsg Corporation's auditors
and the audit committee of Trsg Corporation's board of directors (or
persons performing the equivalent functions):
(a) all significant deficiencies in the design or operation of
internal controls which could adversely affect Trsg Corporation's
ability to record, process, summarize and report financial data
and have identified for Trsg Corporation's auditors any material
weaknesses in internal controls; and
(b) Any fraud, whether or not material, that involves management
or other employees who have a significant role in Trsg
Corporation's internal controls; and
6. Trsg Corporation's other certifying officer and I have indicated in
this quarterly report whether there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our recent evaluation,
including any corrective actions with regard to significant
deficiencies and material weaknesses.
Date: November 13, 2002
/s/ Richard Bailey
-------------------------------------
Richard Bailey
Trsg Corporation, Chief Executive Officer
8
Index to Exhibits
Exhibit Page Description
3(i) * Articles of Incorporation of the Company
(incorporated herein by reference to the Company's Form
S-18 as filed with the Securities and Exchange
Commission on December 6, 1988).
3(i)(a) * Certificate of Amendment of Articles of Incorporation
Changing the Company's Name From Jutland Enterprises,
Inc. to Professional Wrestling Alliance Corporation
and increasing the number of authorized shares of
stock dated November 15, 1999.(Incorporated herein by
reference to the Company's Form 8-K filed with the
Securities and Exchange Commission on December 3, 1999).
3(ii) * Bylaws of the Company, as amended (incorporated
herein by reference to the Company's Form S-18 as filed
with the Securities and Exchange Commission on December
6, 1988).
Material Contracts
10(i) 10 Consulting Agreement between Gateway Distributors and
TRSG Corporation dated June 10, 2002.
* Incorporated by reference from previous filings of the Company, as noted.
9
Exhibit 1
June 10, 2002
Consulting Agreement
Between
GATEWAY DISTRIBUTORS LTD
And
TRSG CORP
The purpose of this letter is to outline the terms and conditions of the
engagement by the Company of this firm (the "CONSULTANT") as the Company's
exclusive strategic advisor for Business Combinations as set forth below.
Gateway Distributors LTD has entered into a Consulting Agreement with Neptune
Communications and will provide the same services to TRSG CORP as outlined in
the terms below.
Introduction and Exclusive Nature
CONSULTANT will assist the Company in arranging introductions to strategic
partners ("Strategic Partners") and/or discussions that may facilitate its
business as well as supply consulting services to Management from time to time
to assist as to Business Combinations discussed herein. CONSULTANT may also
pursue other appropriate objectives or prospects deemed necessary to further the
interests of the Company, all in the discretion of CONSULTANT.
CONSULTANT is appointed the Company's exclusive advisor for Business
Combinations for the term of this Agreement. During the term, Company shall not,
directly or indirectly through a subsidiary or otherwise, a. Engage or
compensate any person or firm supplying the same or similar services; or b.
Consider, execute any agreement relating to, or consummate any Business
Combination transactions or opportunities unless presented by the CONSULTANT.
Company acknowledges and agrees that the compensation, prior to the consummation
of any Business Combination, to Consultant does not adequately compensate
Consultant for Consultant's valuable time and expenditures, and so provisions
apply herein to insure that Company will not utilize other consultants planning
which are supplied to CONSULTANT, and reasonably discuss comments and questions.
10
Additional Consulting
CONSULTANT may also provide the following services to the Company if and as we
agree during the term of this Agreement, or same may be supplied by other
introducing Consultants:
a) Assistance and advisement as to your formal Business Plan or amendments
within the ability of CONSULTANT.
b) Introductions to legal counsel, accounting, investment banking and other
professionals to provide services to the Company as needed.
c) Introductions to potential strategic partners, business associates and
other contacts to assist the Company with the implementation of its
business plan.
d) Identifying candidates for potential mergers and acquisitions.
e) Introductions to technical professionals who are competent in executing the
business's development needs.
Consultant or other consultants as determined by Consultant in its discretion
herein may supply any and all services of Consultant.
II - Definitions
For purposes of this Agreement, Strategic Partner(s) includes, but is not
limited to, any company, person or entity that furthers the Companies
objectives, either domestically or internationally by partnering with the
Company, licensing or purchasing or marketing of services/products; acting as an
agent; or entering into a joint venture agreement or merger, sale, purchase,
exchange or acquisition in any manner or similar agreement or transaction
("Business Combination").
III - Compensation/Expense Reimbursement
Company and CONSULTANT agree to the following as the compensation or expense
reimbursement for the performance of the services outlined above.
Business Combination Compensation and Expense (Non-accountable) Reimbursement
(Check if applicable: (X )
As a non-refundable payment for Business Combination introductions and advice,
whether or not successful or accepted by the Company, Company shall make
available to CONSULTANT a sum of 45,000,000 (45 MILLION) Shares of restricted
stock at this time, to compensate for all fees and expenses of CONSULTANT and
firms or persons specifically engaged and contracted to CONSULTANT without the
need of CONSULTANT to supply any accounting, and, if checked ____X___,
CONSULTANT hereby agrees that no other fees or expenses are due as of this date
under this Agreement; provided HOWEVER:
a. The parties acknowledge that such Shares, upon issuance and delivery to
CONSULTANT as stated below, shall be deemed available to CONSULTANT as
unearned and subject to being earned by CONSULTANT and other consultants
engaged or arranged by CONSULTANT, all as determined by CONSULTANT, and not
subject to return to the Company notwithstanding any reason whatsoever, the
CONSULTANT has full authority to direct where the Shares shall be sent and
transferred and the Company shall not interfere in any way whatsoever, that
the CONSULTANT hereby directs the Shares be sent initially to the
CONSULTANT at 3095 East Patrick Lane, Suite 1, Las Vegas, NV 89120.
11
The parties agree that the value of shares of stock given to CONSULTANT is not
equal to any trading price of the common stock of the Company as stated under
Exhibit B and that a certain number of the shares may be intended, as determined
by the CONSULTANT, for others, who are consultants, or otherwise as to the
CONSULTANT, so such shares for others are not owned by the CONSULTANT and will
not be deemed by the CONSULTANT as compensation to CONSULTANT.
Expenses (Check if applicable: X )
Any other costs and expenses incurred by CONSULTANT shall be reimbursed, but
only on a pre-approved basis in writing, at the sole discretion of Company.
IV - Disclosure; Escrow; and Additional Services
A. In conjunction with CONSULTANT becoming familiar with the Company, Company
will make available on a timely basis such information as CONSULTANT may
reasonably require regarding Company, its assets, liabilities, earning power,
financial condition, historical performance and assumptions used in projecting
future results. For example, promptly following the execution of this Agreement,
Company will supply CONSULTANT with the items listed under Exhibit A.
V - Indemnification
Company will afford CONSULTANT the opportunity to review any information which
Company plans to make to third parties relating to proposed transactions with
parties introduced to Company pursuant to this Agreement. Company will also
indemnify and hold harmless CONSULTANT, related entity officers, directors,
employees, partners, affiliates, advisors or any investment banker, attorney or
other agent retained by CONSULTANT against any liability, losses, claims,
damages (including the amount of any settlement), or expense (including
attorney's fees and costs) resulting from misstatement of a material fact in or
omission of a material fact from information furnished by Company.
VI - Termination
This Agreement shall remain effective for 12 months from its date ("Expiration
Date"), and thereafter all rights of the parties shall cease except for: the
right of CONSULTANT to receive and the obligation of Company to pay (a) any
payment of anything due for any reason hereunder and (b) any payment for any
reason due after Expiration Date and the following sections shall survive any
termination: III (as to accrued compensation, accrued expense reimbursements
otherwise due, and fees which become due after termination due to CONSULTANT
efforts prior to termination for a Business Combination), V, VI, VII and VIII.
12
VII - Other Conditions
This Agreement contains the entire agreement between Company and CONSULTANT and
supersedes all prior agreements as to the subject hereof and can only be amended
in writing as mutually agreed to by Company and CONSULTANT. It is expressly
understood that each party is an independent contractor with the sole
responsibility for its own business. It is further agreed and understood that
CONSULTANT is not and shall not represent itself to be an agent of Company for
any purpose. Neither party has the right or authority to assume or create an
obligation of any kind for or on behalf of the other, or to bind the other in
any respect. It is expressly understood that CONSULTANT will not act as a broker
or finder, or as an attorney or as an accountant, and that the compensation and
expense reimbursement referred to above is in exchange for strategic advisory
services, and to reimburse CONSULTANT and is specifically not a brokerage fee,
nor a finder's fee, nor a legal fee, nor an accounting fee. Any lawyers or
accountant or advisors of CONSULTANT, unless specifically engaged in writing
between the Company and such person or firm, is not under contract with the
Company and represents CONSULTANT exclusively. All payments to CONSULTANT are
non-refundable. Company represents that consummation of any transaction
contemplated herein will not conflict with or result in a breach of any of the
terms, provisions or conditions of any written agreement to which it is a party.
VIII- MISCELLANEOUS PROVISIONS
A. Gender. Wherever the context shall require, all words herein in the masculine
gender shall be deemed to include the feminine or neuter gender, all singular
words shall include the plural, and all plural shall include the singular.
B. Severability. If a court of competent jurisdiction, the remainder of this
Agreement, and the application of such provision in other circumstances hereof
deem any provision unenforceable shall not be affected thereby.
C. Further Cooperation. From and after the date of this Agreement, each of the
parties hereto agrees to execute whatever additional documentation or
instruments as are necessary to carry out the intent and purposes of this
Agreement or to comply with any law.
D. Waiver. No waiver of any provision of this Agreement shall be valid unless in
writing and signed by the waiving party. The failure of any party at any time to
insist upon strict performance of any condition, promise, agreement or
understanding set forth herein, shall not be construed as a waiver or
relinquishment of any other condition, promise, agreement or understanding set
forth herein or of the right to insist upon strict performance of such waived
condition, promise, agreement or understanding at any other time.
E. Expenses. Except as otherwise provided herein, each party hereto shall bear
all expenses incurred by each such party in connection with this Agreement and
in the consummation of the transactions contemplated hereby and in preparation
thereof.
13
F. Amendment. This Agreement may only be amended or modified at any time, and
from time to time, in writing, executed by the parties hereto.
G. Notices. Any notice, communication, request, reply or advice (hereinafter
severally and collectively called "Notice") in this Agreement provided or
permitted to be given, shall be made or be served by delivering same by
overnight mail or by delivering the same by a hand-delivery service, such Notice
shall be deemed given when so delivered. For all purposes of Notice, the
addresses of the parties herein shall be their addresses unless later advised in
writing.
H. Captions. Captions herein are for the convenience of the parties and shall
not affect the interpretation of this Agreement.
I. Counterpart Execution. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument and this Agreement may be
executed by fax.
J. Assignment. This Agreement is not assignable without the written consent of
the parties.
K. Parties in Interest. Provisions of this Agreement shall be binding upon and
inure to the benefit of and be enforceable by the parties, their heirs,
executors, administrators, other permitted successors and assigns, if any.
Nothing contained in this Agreement, whether express or implied, is intended to
confer any rights or remedies under or by reason of this Agreement on any
persons other than the parties to it and their respective successors and
assigns, nor is anything in this Agreement intended to relieve or discharge the
obligation or liability of any third persons to any party to this Agreement, nor
shall any provision give any third persons any right of subrogation over, or
action against, any party to this Agreement.
L. Entire Agreement. This Agreement constitutes the entire agreement and
understanding of the parties on the subject matter hereof and supersedes all
prior agreements and understandings on the subject hereof.
M. Construction. The parties agree and acknowledge that each has reviewed this
Agreement and the normal rule of construction that agreements are to be
construed against the drafting party shall not apply in respect of this
Agreement given the parties have mutually negotiated and drafted this Agreement.
N. Cooperation. The parties hereto agree to cooperate with one another in
respect of this Agreement, including reviewing and executing any document
necessary for the performance of this Agreement, to comply with law or as
reasonably requested by any party hereto, or legal counsel to any party hereto.
O. Independent Legal Counsel. The Company will retain legal counsel and be
responsible for handling any legal issues related to the Companies filings,
audits, Public Relations, or legal actions by anyone regarding vendor services
provided by Consultant for the Company. This will apply to all agreements
written in the past by Consultant as well as the future and includes all of the
Companies affiliates or subsidiaries.
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P. Choice of Law/Venue. The laws of the State of Nevada shall apply to this
Agreement without reference to conflict of law principles, and the sole venue
for any dispute or suit between the parties shall be a court of competent
jurisdiction in the location of the CONSULTANT in Nevada.
By both parities signing this agreement it will become effective on June 10,
2002.
TRSG CORP
/s/ Rick Bailey
__________________________
Rick Bailey, President
Gateway Distributors LTD
/s/ Rick Bailey
By: ________________________
Rick Bailey, Director
/s/ Flo Ternes
By: ________________________
Flo Ternes, Director
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